Libertarianism doesn’t have a lot of slogan-ready axioms, but one one them is “incentives matter.” One corollary might be “contracts matter.” Learning that an Australian couple has abandoned their baby with Down’s Syndrome with their impoverished Thai surrogate will lead many, including Jezebel, to conclude, definitively, that these people are assholes.
But there’s more at work here than simple human horribleness. What we have here, in addition, is a lack of clear contracting, and the unintended consequence of first-world countries disallowing market-rate payments for surrogates.
First, let’s look at what happened. The couple looked to Thailand in part because there’s a massive dearth of Australian surrogates. It’s obviously preferable in every way to have a local surrogate, so there are two likely explanations here.
First, perhaps Thai women will carry children for so much less money than Australian women that this couple chose the cheaper, though less preferable option. Unfortunately, it’s difficult to know what the market price of an Australian surrogate is, because the country, like many first-world countries, caps the amount which women can earn for carrying another couple’s child. The first consequence of this legislation is that we don’t know what the market price of Australian surrogacy is.
The other possibility is that capping the amount a woman can legally earn for renting out her womb has created a shortage of women in Australia willing to do so. Perhaps the law of supply and demand and the economic consequences of price caps, namely shortages, applies to wombs as much as it does to gasoline. It may be that relying on women to open their uteruses to other couples’ kids out of the goodness of their hearts isn’t good policy, if you actually want any of them to do it.
It seems like the West has essentially decided that they don’t care whether Western women offer surrogacy. The countries’ governments are happy to see couples outsource the task to developing nations like India, where an advanced medical industry and rampant, crushing poverty has created the perfect conditions for a thriving, and poorly contracted surrogacy market.
Because the saddest thing about what happened with the Australian couple and the Thai surrogate is that it could have very easily been avoided with a well-written contract.
When the surrogate found out she was carrying twins, and that one of them had Down’s Syndrome, the couple requested that she abort. The desire to abort is hardly unusual. According to ABC News, an estimated 92% of couples choose to abort when they receive a prenatal diagnosis of Down’s Syndrome. But the surrogate refused. So the couple took the healthy kid, and left the other one with her.
An Australian group called Hands Across the Water created a GoFundMe campaign with a goal of $200,000 to provide the child, Gammy, surgery and other care. It raised over $271,000.
What should be done in the case of congenital defect should have been spelled out very clearly in the surrogacy contract. It’s a common-enough problem, that to not address it seems incredibly negligent. That way, the couple could be assured that were using a surrogate who would agree to an abortion if that’s how they chose to deal with such a diagnosis. Additionally, the surrogate could screen for couples who agreed to care for their child, regardless of how healthy the baby or babies turned out to be. Of course we should all be able to expect that a couple will take care of the kids they create, regardless of where or how. But out here in the real world, we need contracts.
Another problem with outlawing market-price surrogacies in the West is that the contracts in developing nations are often drawn up by unscrupulous agents. According to a survey by the Indian government, sometimes poor, uneducated women are signing surrogacy contracts that they do not fully understand.
Well-crafted and well-enforced contracts are essential to free exchange, regardless of the market. When you look at countries whose economies are strong, like Australia, and compare them with weaker economies, such as India and Thailand, one thing you’ll see is a positive correlation between a robust and fair system of contract enforcement and economic development.
Relying on people to be angels, whether it’s to give up use of their uteruses without sufficient payment or react appropriately when their surrogate refuses abortion, isn’t a recipe for success. It’s magical thinking, and it makes everyone poorer.
Repealing laws which cap surrogacy payments would at the very least reveal what the actual market price is for an in-country surrogacy. And it might just move surrogacy to the countries of demand, where contracts are better written, better enforced, and more clearly understood.
This post originally appeared at LibertyChat.com.